Big Industry Output Shrinks in October, Raising Concerns

Big Industry Output Shrinks in October, Raising Concerns

A cold wind swept through the manufacturing sector in October, with large-scale industrial output (LSM) contracting by 4.08% year-on-year, according to data released this week. This unexpected dip marks a worrying trend and raises questions about the health of the economy.

Pakistan’s Large Scale Manufacturing (LSM) contracted by 4.08% YoY, with key contributors to the decline including the textile, paper and board, iron and steel, electrical equipment, automobiles, and furniture sectors.
In October, there was a notable decline in iron and steel production, which experienced a decrease of 1.56pc and electrical equipment of 17.20pc.
The production of fertilizers experienced a surge of 8.81pc, while the production of rubber items witnessed a growth of 9.77pc. The production of pharmaceutical products experienced a significant surge, with an impressive increase of 26.56pc.
Despite a positive turn in August and September after 14 months of contraction, 13 out of 22 sectors in LSM reported negative growth in October.
Factors such as the removal of import restrictions, clearance of outstanding LCs, and improved dollar liquidity are expected to boost economic activity.

The textile sector showed major negative growth, particularly in yarn, cloth, and garments. The auto sector also experienced a 58.31% slump in October. Petroleum product sales recorded a notable decline of 18% in 4MFY24.

(Source: DAWN NEWS)